Nexxus Petro Industries Ltd. is set to launch its initial public offering (IPO) on September 26, 2024, aiming to raise ₹19.43 crores through a fresh equity issue of 18.5 lakh shares, priced at ₹105 each. This fixed-price IPO will be open for subscription until September 30, 2024, with shares expected to be listed on the BSE SME platform on October 4, 2024. Founded in October 2021, Nexxus Petro specializes in trading and manufacturing petrochemical products, particularly bitumen and its derivatives. The company has shown impressive growth, with a reported 67% increase in revenue and a 73% growth in profit after tax between FY2023 and FY2024, positioning itself as a key player in the expanding petrochemical sector.
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Expert Opinions
Nexxus Petro Industries’ IPO is generating mixed market sentiment, reflecting cautious optimism among investors. The company demonstrates notable strengths, including a robust growth trajectory in the bitumen sector, with revenue surging from ₹4.84 crores in FY22 to ₹23.84 crores in FY24, and strong profitability indicators such as a 20.81% ROCE and a 61.77% ROAE for FY24. However, risks persist, particularly market volatility and industry-specific challenges that could impact performance.
Valuation analysis suggests the IPO is fairly priced, with a pre-issue P/E ratio of 11.68x compared to an industry average of 39.88x. From a long-term investment perspective, while Nexxus Petro Industries shows potential for growth, the absence of a Grey Market Premium and inherent risks may lead some investors to approach with caution, making it more suitable for those with a higher risk appetite.
Investor Considerations
Nexxus Petro Industries presents a compelling investment opportunity, characterized by strong company performance and fundamentals. The firm has demonstrated significant revenue growth, with fiscal 2024 revenues reaching ₹238.37 crores, up from ₹142.83 crores in the previous year, indicating robust operational efficiency. The sector outlook remains positive, driven by increasing demand for bitumen products in India’s expanding infrastructure projects.
In terms of IPO valuation, the pre-issue P/E ratio stands at 11.68x, notably lower than the industry average of 39.88x, suggesting attractive pricing for potential investors. Growth prospects are promising as the company aims to capitalize on government initiatives in infrastructure development. However, investors should be aware of risk factors such as high debt levels and market competition from established players. A long-term investment horizon may be beneficial, as Nexxus Petro Industries could leverage its position in a growing market, provided it effectively manages its financial challenges.
FAQs
The Grey Market Premium showed poor accuracy in predicting Nexxus Petro Industries’ listing performance. While the GMP of ₹0 suggested a flat listing at the issue price, the stock actually delivered a significant gain of 20%. With a prediction error of 20%, the GMP completely failed to anticipate the strong positive market sentiment and substantial listing gains, demonstrating its unreliability as a price predictor in this case.
Nexxus Petro Industries IPO Current GMP is ₹00.
Nexxus Petro Industries IPO Expected Returns is 0%.
Nexxus Petro Industries IPO estimated listing price is ₹105.